Several Puget Sound tribes that are flush with casino cash won't rest on their jackpots. Each is diversifying with business ventures, real-estate deals and construction projects all over the country.
With a casino that stretches for a third of a mile, the Muckleshoot Indian Tribe could be forgiven for taking some time to revel in its prosperity.
This tribe just outside Auburn, about 2,100 people strong, has in just a dozen years risen from poverty to enjoying comforts many others take for granted, from high-quality medical facilities to decent housing.
Instead of letting it ride, though, last year the Muckleshoots famously bought the landmark Salish Lodge near Snoqualmie for $62.5 million. The tribe has invested in a hotel-condo project in downtown Seattle. And it is moving beyond entertainment and hospitality, with a $3 million investment in a California manufactured-home company.
Now the Muckleshoots want to team up with other tribes to buy 70 acres on the end of The Strip in Las Vegas for that city’s first Native-owned casino property.
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“It would be huge, even for Nevada standards,” said Angelica Wellman, the tribe’s assistant chief executive officer. “We would be breaking new ground.”
The Muckleshoots are only one of several Puget Sound tribes that are flush with casino cash but unwilling to rest on their jackpots. Each is quickly diversifying with business ventures, real-estate deals and construction projects all over the country.
And they’re suddenly among the highest rollers in business and industry.
While the Muckleshoots take a crack at Vegas, the Tulalip Tribes in northern Snohomish County are turning prime land into retail and commercial success. The Puyallups outside Tacoma are planning a deep-water seaport with a world leader in container shipping.
Even the tiny Jamestown S’Klallam Tribe of the Olympic Peninsula is buying into a medical-supply company in California and taking over an icon of capitalism: an 18-hole golf course.`
Of course, big-wheel economics still elude most Washington tribes, which are too far from major markets and highways. They still face deep poverty and worse. And even the casino tribes still have tough social issues to tackle.
But for the lucky ones, “there is a tremendous amount of opportunity,” said Jeff Carey, of Merrill Lynch in New York, which is helping tribes turn casino profits into long-term wealth.
“Investors in the past didn’t take tribes seriously, and now they very much do,” Carey said.
“It’s changed the balance of power.”
“We can pay cash”
Wellman, 34, the first in her family to go to college, sees Washington tribes getting growing economic respect from people who ignored them a few years ago, and even exploited them.
“People are changing their way of thought, to realize tribes are a growing force,” she said. “Their economies are growing, and they are providing jobs. We are helping the economy.”
Last year, the Muckleshoots paid $3 million for the majority interest in Forma Home Systems in Danville, Calif. They also secured the option to build the company’s next factory in the Seattle area.
The Muckleshoots also have invested in the Four Seasons Hotel and Residences in downtown Seattle.
But in Las Vegas, the tribe is looking long. It’s seeking other tribal partners, and possibilities include some of the biggest names in the business: the Mashantucket Pequots of Connecticut, who run the world’s largest casino; or the Seminoles of Florida, who recently bought the Hard Rock Cafe chain. The Shoshone-Bannock Tribes of Fort Hall, Idaho, already have signed on.
The idea is to buy enough land at the southern end of Vegas’s famous Strip for a casino managed by Ellis Las Vegas, a non-native company that runs other tribes’ casinos.
The resort complex is envisioned as a modernist fantasyland with an indoor ski park, a Rodeo-Drive-style shopping mall with air-conditioning under a clear plastic roof, and a 30,000-seat stadium with retractable roof. It might even hold a plastic-surgery clinic.
The project would have a sizable Native-American museum and a native healing and spiritual center.
The Muckleshoots say partnership with other tribes provides much more than capital to swing the Las Vegas deal. It would give the tribal partners access to each other’s customer lists and other opportunities to build customer traffic to and from their own casinos and the Las Vegas venture.
It’s also seen as a huge training opportunity for tribal members. The Muckleshoots envision a job-training facility with 40 apartments. And they’re thinking about including a recording studio, where employees from the Muckleshoots’ White River Amphitheatre or casinos could learn tricks of the trade.
All of the tribe’s business ventures are considered not just for potential profit but for the training potential, Wellman said.
But make no mistake: Muckleshoot tribal enterprises make money. Wellman said she notices eyebrows go up when it’s time to talk terms.
“It’s ‘You guys can finance this.’ We say, ‘Well, actually, we can pay cash for this — today.’ “
“A long time coming”
The transformation has been just as profound for the Puyallup Tribe.
Its casino, the Emerald Queen, has not only allowed full college scholarships and other social services for members, but all 3,500 tribal members get $2,000 checks each month.
There’s plenty more, for some of the biggest deals around.
Last spring, the tribe teamed up with SSA Marine, the world’s largest private container- and cargo-handling company, to build and operate a seaport on Tacoma’s East Blair Waterway.
The $300 million project will be the largest recent private investment in Tacoma, creating jobs when it opens in 2012. It will pump up shipping volumes on Commencement Bay with four new berths for ships from Asia and 180 acres of other facilities.
SSA would manage it for the first 50 years, then the tribe would take over.
“We have a chance to do something fantastic for the tribe, and the surrounding community,” said Chad Wright, who heads the Puyallup Tribe’s economic-development arm.
When Wright was growing up in the Puget Sound area, most tribal members worked in farm fields or fished, if they worked at all. Nowadays, the 32-year-old lawyer and Stanford business-school graduate takes visitors around the reservation in a new BMW, though he favors bluejeans.
Herman Dillon Sr., 76, the tribal chairman, boasts that the tribe is now one of the top five employers in Pierce County.
An impressive switch from the days when economic development meant a billboard by the freeway and a gas station.
“This has been a long time coming,” he said.
Indian casinos generated more than $1.3 billion last year, snagging 67 percent of all net gambling proceeds in Washington. And that has helped some tribes make headway against poverty.
The 2000 census showed Indian people had made the biggest gains in family income among all racial groups in the state since the previous census. Indian incomes rose 16 percent from 1990 to 2000. But Indians were still the poorest race in Washington and endured the highest rates of unemployment, the census said.
One problem has been that most of the casino wealth has clung to the Interstate 5 corridor.
But there are exceptions.
The Jamestown S’Klallam tribe outside Sequim, Clallam County, long one of the poorest, most battered tribes in Washington, now makes enough from its 7 Cedars Casino to invest in the International Manufacturing Group, a West Sacramento medical-supply company that has about $30 million a year in sales.
The tribe also is spending $80 million to double the size of 7 Cedars, said W. Ron Allen, the tribal chairman.
The tribe is building a large gas station with a 12,000-square-foot store near the casino and runs full-service construction companies that handle major contracts all over the country, including military construction.
Last year, the tribe bought the Dungeness Golf Course in Sequim and is buying new carts, installing new water features and improving the clubhouse.
“We have ambitious plans; we are like everyone else, we are looking for ways to expand,” Allen said. “We are building up that business portfolio.”
None of this comes as any surprise to Carey, the Merrill Lynch manager. Just six years ago, “you got a lot of disbelief” from fellow investment managers, he said.
“It was, ‘How can you spend your entire day working with the tribes? Do tribes own big businesses?’ “
Then last year, Carey handled the Seminole Tribe’s $1 billion purchase of Hard Rock International. Here in Washington, Merrill Lynch helped the Stillaguamish Tribe of Snohomish County issue $71 million in bonds for expanding the Angel of the Winds casino near Arlington.
Tribes that once had to grovel to start modest ventures now call the shots and can pick and choose their investment targets and partners.
Still, not everyone is comfortable with such rapid prosperity.
Critics charge that tribes have unfair advantages: Tribal businesses on reservations don’t pay many of the state taxes other businesses do. Tribes have monopolies on the best gambling. And they don’t have to follow such state laws as Washington’s indoor-smoking ban.
“The state has to be careful about unequal treatment among citizens,” said Paul Guppy of the Washington Policy Center, a conservative think tank in Seattle.
“Our bottom line is not that Indian tribes should lose their tax advantages, but that the state should level the playing field by creating a lower tax and regulatory burden for all businesses.”
But one of Washington’s most prominent former officials couldn’t be more thrilled.
As a U.S. senator in the 1980s, Republican Dan Evans pushed for federal legislation that recognized tribal sovereignty, which paved the way for casinos and other businesses.
“For a century, frankly, Indian tribes have been screwed by the U.S.,” said Evans, who served three terms as Washington governor from 1965 to 1977.
“This gives them a lot more independence, and the potential for economic well-being that is much broader than casino gambling. It will be a huge benefit over time. They are taking the next step.
“It’s precisely what I hoped would happen.”
More jobs than Indians
But no one is more aware of the fragility of success than Indians, who have survived centuries in which nearly everything was taken.
No tribe expects casino wealth to last. So diversification doesn’t just mean power. It means survival.
“It could go away with the stroke of a pen,” said state Rep. John McCoy, D-Tulalip, general manager of the tribes’ Quil Ceda Village business park along I-5 north of Marysville.
Though the Tulalips have one of the most successful casinos, they have turned their land into a massive retail and commercial enterprise, with major big-box and outlet stores.
And the tribes have about 1,000 acres still available for development.
Once plagued by unemployment, today the tribes have a job for any member who wants one, McCoy said.
“Any Indian within 50 miles can have a job,” he added. “We have more jobs than we have Indians.”
New projects at Quil Ceda Village could include high-tech light manufacturing, warehousing or office space, McCoy said. And it all benefits the greater community, he said.
“Every dollar cycles right back into the community,” McCoy said.
And those are bets that people can count on for the long haul, he said. No outsourcing overseas or south-of-the-border for them.
“We are the Tulalip Tribes, here in Snohomish County,” McCoy said. “We are home.”
Lynda V. Mapes: 206-464-2736 or firstname.lastname@example.org
Muckleshoot Tribe’s assistant chief executive officer